While proposals to extend President George W. Bush’s tax cuts and to adopt a European-style value-added tax (VAT) have received considerable attention recently, a handful of other proposals have been floated for altering the federal tax code.

White House Budget Director Peter Orszag said recently he was confident Congress would tackle tax provisions that, without action, would expire at the end of the year. But some experts say much more will be needed to to reduce the complexity and increase the fairness of the tax system.

“You would think that now would be the perfect opportunity to reform our tax code given that that we have a system that is complicated, inefficient, unfair, and not very good at raising revenue,” said Rosanne Altshuler, co-director of the Urban Institute–Brookings Institution Tax Policy Center.

Congress has to make some critical choices, including whether to retain existing income tax brackets or allow them to revert back to higher levels similar to those under President Bill Clinton in the 1990s. Lawmakers must also address the estate tax, which expired at the end of 2009, as well as the Alternative Minimum tax, which will keep hitting an increased number of taxpayers if a relief measure or “patch” is not approved. Former Federal Reserve chairman Paul Volcker’s recent suggestion that Congress and the Obama administration consider a VAT tax, a form of a national sales tax, is generating buzz among policy makers looking for new sources of revenue.

Though proposals to extend Bush tax cuts or impose a VAT are attracting major attention, there are many alternative tax system overhaul ideas floating as well. Here are some:

Wyden-Gregg BillThis proposal, unveiled by Sens. Judd Gregg, R-N.H., and Ron Wyden, D-Ore., in February, would revamp the tax code by first shortening the individual income tax return to one page in an effort to cut down on the IRS-estimated 6.6 billion hours Americans spend preparing their taxes every year. The plan reduces the number of tax brackets for individuals from six to three, capping the top rate at 35 percent, and lowers the corporate income tax rate from 35 percent to 24 percent -- a move which Gregg says will promote domestic business expansion. Wyden also noted that The Heritage Foundation, a conservative think tank, estimated their proposal would create about 2 million jobs in its first year. It nearly triples the standard tax deduction for families earning up to $200,000 and repeals the Alternative Minimum Tax as well.

Though the bill, S. 3018, preserves most of the commonly claimed individual tax credits and deductions, such as for mortgage interest, children, earned income and charitable contributions, it axes most of the approximately 10,000 exemptions, deductions and credits currently allocated for special interests. Though the bill has not been formally scored, Sens. Wyden and Gregg said a Congressional Research Service analyst told them that the proposal seemed deficit-neutral.

“At some point both Democrats and Republicans conclude that you cannot have so much of your national wealth being picked off by various interest groups, which is essentially what happens in the tax code,” said Wyden.

National Retail Sales Tax or “Fair Tax”A “fair tax” system would mean scrapping income taxes, eliminating the IRS, and instead raising revenue by taxing consumption at the cash register with high retail sales taxes, much like the kind individuals pay in state and local taxes. Advocates say it would promote economic growth by allowing people to keep their entire paycheck, and let their spending decisions dictate how much tax they pay. But many economists concede that the national sales tax rate would have to be much higher than state or local taxes if it is to replace all other tax collections.

Even though the concept can count Georgia Sen. Saxby Chambliss, Arkansas Gov. Mike Huckabee, and former Democratic Sen. Mike Gravel as supporters, members of both parties have found problems with this approach. One of the most obvious issues is that by replacing income taxes and exempting businesses, the high tax at the cash register might encourage individuals to attempt to dodge the rules and present themselves as business owners or find ways to purchase items off the books. Also, some economists call the system regressive, since lower-income groups would spend a higher proportion of their income. Though fair-tax advocates have countered that by proposing prebates — monthly or quarterly checks sent out to those who qualify as low-income that would reimburse them for taxes on basic necessities. But members of both major parties are not convinced. Some conservatives say that solution would defeat the purpose of the “no exemption” concept. And multiple experts seem to agree that though the national sales tax concept removes the IRS completely, a prebate system would create new administrative demands. It would require a new agency to administer these refunds, which would need to make adjustments in each case based on factors like family size and income, Altshuler said.

The Flat TaxThis system would impose one flat tax rate on anything an individual earns above the personal exemption, making the tax base a reflection of wages, salaries, pensions, and other forms of compensation. The framework does not include capital gains taxes, or a tax on savings, and does not provide tax breaks or deductions. Though conservatives hail it as a way to increase incentive for investment by the wealthy, liberals contend the system wouldn’t tax the wealthy enough.

“You could introduce small degrees of progressivity by having a few varying rates, but the danger is the further you get away from a flat tax the closer it gets to our current mess of a tax code,” said Curtis Dubay, senior tax policy analyst at The Heritage Foundation. Some on the left say the flat rate would have to be very high to generate enough revenue to supplant income taxes.

Paul Ryan’s “Roadmap for America’s Future” ProposalRep. Paul Ryan, R-Wis., introduced a plan in January 2010 which aims to reduce tax expenditures by creating a simpler federal income tax option. The alternative system would have a larger tax base, no estate tax, no Alternative Minimum tax, and no tax on investment income; but virtually no deductions and exemptions, either. It would replace corporate income taxes with an 8.5 percent Business Deduction Tax, which would allow companies to expense costs associated with investment, but no longer deduct wages. Taxpayers could elect to use the simple system, or remain with the current system, which would still include an estate tax.

Only time will tell whether any of these proposals move forward, even though many experts agree that reforming the tax code is mandatory. “I don’t think there’s any choice. As a practical matter we’re going to have to address the issue of tax reform … And it’s going to take Congress stepping up and saying, 'we’re going to step on a lot of toes but we’re going to get a better law,'" Gregg said.